1. Discuss the reasons for vertical integration as well as the disadvantages of vertical
integration.
Vertical integration is the degree to which a firm owns its upstream suppliers and its
downstream buyers.
A company exhibits backward VI when it controls subsidiaries that produce some of
the inputs used in the production of its product. A company tends toward forward VI
when it controls distribution centers and retailers where its products are sold.
Disadvantages of VI:
1. Cost Disadvantages.
2. Technological Change
3. Demand Uncertainty- A motivation for tapered integration
4. Bureaucratic or Governance costs.
…………………………………………………..
2. Discuss the objectives of a globalization strategy and how companies and countries
can benefit from this strategy
A global strategy is an international strategy through which the firm offers
standardized products across country markets, with competitive strategy being directed
by the home office.
Benefits:
1. Emphasizes economies of scale
2. Offers greater opportunities to take innovations developed at the corporate
level or in one country and utilize them in other markets.
3. Produce lower risk.
Companies and countries can benefit from this strategy if they sharing resources and
facilitating coordination and cooperation across country boundaries, which in turn require
centralization and headquarters control. The strategy must deploy in areas where regional
integration among countries is occurring.
1
……………………………………………..
3. Discuss the motives for diversification as well as the risks.
Motives for Diversification
•
Transferring Core Competencies
•
Leveraging (powering) Existing Resources
– Developing New Competencies
•
•
Economies of Scope
–
•
•
Better efficincey in managing
Risk spreading
–
•
The output production can be increased highly
Efficient Management
–
•
Stretching Core Competencies
The BCG Matrix.
Market power
–
mutual forbearance
–
predatory pricing
Growth maximization
- Managerial capitalism
Risks of diversification
2
Diversification is the riskiest of the four strategies presented in the Ansoff matrix and
requires the most careful investigation. Going into an unknown market with an unfamiliar
product offering means a lack of experience in the new skills and techniques required.
Therefore, the company puts itself in a great uncertainty. Moreover, diversification might
necessitate significant expanding of human and financial resources, which may detracts
focus, commitment and sustained investments in the core industries. Therefore a firm
should choose this option only when the current product or current market orientation
does not offer further opportunities for growth. In order to measure the chances of success,
different tests can be done:
The attractiveness test: the industry that has been chosen has to be either attractive or
capable of being made attractive.
The cost-of-entry test: the cost of entry must not capitalize all future profits.
The better-off test: the new unit must either gain competitive advantage from its link with
the corporation or vice versa.
Because of the high risks explained above, many companies attempting to diversify have
led to failure.
……………………………………………………………
4. Discuss the reasons for Mergers and Acquisitions as well as the benefits.
Merger: The combining of two or more entities into one, through a purchase
acquisition or a pooling of interests.
Differs from a consolidation in that no new entity is created from a merger.
Acquisition; Taking control of a firm by purchasing at least simple majority of
its shares, etc.
Reasons for making acquisitions:
1. Learn and develop new capabilities
2. Reshape firm's competitive scope
3. Increase diversification
4. Lower risks compared to developing new products
3
5. Increase speed to market
6. Cost new product development
7. Overcome entry barriers
8. Increase market power
Benefits of acquisition (not sure):
1. The acquiring and target firms have complementary resources that can be
the basis of core competencies in the newly created firm
2. Facilitating the integration of the two firm's resources
3. The merged firm maintains a low or moderate level of debt by selling off
portions of the acquired firm or some of the acquiring firm's poorly
performing units
4. The acquiring and acquired firms have experience in terms of adopting to
change.
5. R&D and innovation are emphasized in the new firm.
………………………………………………………….
5. What are the major problems associated with mergers and acquisitions.
1. Integration problems
2. Inadequate evaluation of target
3. Large or extraordinary debt
4. Inability to achieve synergy
5. Too much diversification
6. Managers overly focused on acquisitions
7. Too large firms.
…………………………………………………….
6. Explain the major reasons and benefits for engaging in Strategic Alliances as a
strategy.
Reasons:
1. To complement each other.
4
2. Close short falls in each other- technology, failure, skills, space, money,
connections, lobby and advocacy.
3. Access to raw materials capital.
4. Fast track cultural fusion.
5. Access to market
6. Gain synergies
7. Have a bigger voice.
8. Create friendship and eliminate unnecessary fighting and animosity.
Benefits:
9. Allowing each partner to concentrate on activities that best match their
capabilities.
10. Learning from partners & developing competences that may be more
widely exploited elsewhere
11. Adequacy a suitability of the resources & competencies of an organization
for it to survive.
…………………………………………………..
7. Discuss the causes and signs of corporate distress as well as possible solutions or
turnaround `strategies in strategic management.
The signs of corporate distress starts to appear when the company is almost
bankruptcy and getting out the market, the causes are:







Poor strategic choices
Poor execution of a good strategy
High operating costs
High fixed costs that decrease flexibility
Insufficient resources
Unsuccessful R&D projects
Highly successful competitor
Solutions are:
 Eliminate unnecessary stock holding and do JIT whenever possible
5





Upgrade the brain power in all departments
Vigorous training and development of staff
TQM
Product positioning and re-branding
An injection of international marketing brains in the organization; the same applies to
procurement
 Eliminate states within states and company within company scenarios
 Weaken overzealous and dangerous Workers Committees and Trade Unionists (who make the
organization unmanageable) through firing, retrenchments, promotions, strategic transfers
and very painful frustration tactics
 It may be necessary to use brute force and corporate raiding tactics – buying firms at next to
nothing and entirely cleansing management teams and putting new managers altogether.
…………………………………………………………
8.
Briefly explain the advantages and disadvantages of a first mover in an industry.
Advantages:
1. Experience or learning curve: 1st mover may experience 5-10 times the valuation
and revenue of a second mover.
2. 1st mover can gain the loyalty of customers who may be become committed to the
goods or services of the firm that 1st made them available and market share that can
be difficult for competitors to take during future competitive rivalry.
Disadvantages:
1. The costs of early adoption: 1st mover tends to be aggressive and willing to
experiment with innovation and take higher levels of risk.
2. Changing technology.
3. Changing consumer tastes.
………………………………………………
9.
Explain Kanter’s 8 I’s of Strategic Alliances
Kanter 8 I's:
1. Individual excellence.
2. Importance
3. Interdependence
6
4. Investment
5. Information
6. Integration
7. Institutionalization
8. Integrity
………………………………………….
10. Explain the factors that determine structure in an organization?
1. Size
2. Technology
3. Environmental change
4. Top management philosophy
5. Geographical scope
6. Nature of key tasks
7. Strategy
…………………………………………..
11.
What are the components of structure in an organization?
1. Jobs
2. Delegation of authority to do the jobs
3. Grouping of jobs into departments
4. Manager's span of control
5. Number of levels of authority
6. Amount of authority delegated
7. Mechanisms for coordination
……………………………………………………
12.
Briefly explain the functions of culture.
1. Conveys a sense of identity
2. Helps generate employees commitment to something greater than themselves
3. Adds to the stability of the organization as a social system
7
4. Serves as a frame of reference to make sense out of organizational activates and as a
guide for appropriate behavior.
……………………………………………………………..
13.
What is the scorecard for top management?
 Performance Gap
 Restructuring
o Quality
o Costs
o Cycle time
o Logistics
o Head count
o Productivity
o Admin systems
 Adaptability Gap
 Reshaping
o Portfolio choices
o Product mix
o Channels
o Price performance
o New busn model

Opportunity Gap

Revitalization
o Growth
o New business development
o New market development
o Strategic direction
o Resources leverage
8
…………………………………………………………………
14.
What issues do you deal with in strategic scenarios?
1. Strategic intent- vision
2. Core competencies
3. Resources and capabilities
4. Business model
5. Customer value
6. Products
7. Market segments
8. Competitor differentiation
9. Industries
10. Corporate strategy
……………………………………………………………..
15.
What skills do we develop as we do case studies?
 Analytical skills
 Decision Making Skills
 Application skills
 Communication skills
 Time management skill
 Interpersonal skills
 Creative skills
…………………………………………..
16.
Discuss quality dimensions?
 Product quality dimensions
1. Performance- operating characteristics
2. Features- important special characteristics
3. Flexibility- meeting operating specifications over some period of time
4. Durability –amount of use before performance deteriorates
9
5. Conformance- match with reestablished standards
6. Serviceability- ease and speed of repair
7. Aesthetics- how a product looks & feels
8. Perceived quality- subjective assessment of characteristics
 Service quality dimensions
1. Timeliness- performed in the promised period of time
2. Courtesy- performed cheerfully
3. Consistency- giving all customers similar experiences each time
4. Convenience- accessibility to customers
5. Completeness- fully serviced
6. Accuracy- performed correctly each time
……………………………………………………………….
17.
Define and explain the advantages and disadvantages of any one of the four
globalization strategies.
A transitional strategy: is an international strategy through which the firm seeks to achieve
both global and local responsiveness.
Advantages:
1. Combines benefits of local and multidomestic
Disadvantages:
1. Costly implementation
2. Costly management
……………………………………………………….
18.
Define and explain a comprehensive SWOT analysis.
SWOT Analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business
venture. It involves specifying the objective of the business venture or project and
10
identifying the internal and external factors that are favorable and unfavorable to
achieving that objective.

Strengths: attributes of the person or company that is helpful to achieving
the objective.

Weaknesses: attributes of the person or company that is harmful to
achieving the objective.

Opportunities: external conditions that is helpful to achieving the objective.

Threats: external conditions which could do damage to the objective.
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.
…………………………………………………………………
19.
Discuss the BCG Growth Share Matrix
The BCG matrix is a chart that helps corporations with analyzing their business units or
product lines. This helps the company allocate resources and is used as an analytical tool in
brand marketing, product management, strategic management, and portfolio analysis. The
BCG Matrix thus offers a very useful 'map' of the organization's product (or service)
strengths and weaknesses, at least in terms of current profitability, as well as the likely cash
flows.
………………………………………………………………………..
20.
Explain backward and forward integration and the reasons thereof.
The firm attempts to achieve greater market penetration by becoming highly efficient at
servicing its market with a limited product line. Vertical integration is the degree to which
a firm owns its upstream suppliers and its downstream buyers. VI has 2 sub integrations
backward & forward.
A company exhibits backward vertical integration when it controls subsidiaries that
produce some of the inputs used in the production of its products.
11
A company tends toward forward vertical integration when it controls distribution centers
and retailers where its products are sold
………………………………………………………………….
21.
Discuss strategic alliances from formation right up to termination.
Strategic alliances formation:
1. Strategy development.
2. Partner selection
3. Deal negotiation
4. Operating implementation
Strategic alliances termination:
1. Divorce proceedings:
Planned vs unplanned
Friendly vs unfriendly
Both agree vs one partner refuses
2. Possible outcome of termination:
Termination by acquisition
Termination by dissolution
Termination by redefinition of alliance
……………………………………………………..
22.
What are the types of strategic alliances?
1. Joint venture is a strategic alliance in which two or more firms create a legally
independent company to share some of their resources and capabilities to develop a
competitive advantage.
2. An equity strategic alliance: is an alliance in which two or more firms own different
% of the company they have formed by combining some of their resources and
capabilities to create competitive advantage.
12
3. A nonequity strategic alliance is an alliance in which two or more firms develop a
contractual relationship to share some of their unique resources and capabilities to
create a competitive advantage.
………………………………………………………..
23.
State with reasons which of the following statements are correct/incorrect:
(a) Divesting a major product line or market in an organization can be termed as
retrenchment strategy .
(b) “B” in BCG Matrix stands for balance.
(c) Concentric diversification amounts to unrelated diversification.
(d) Vertical diversification integrates firms forward or backward in the product
chain.
(e) A core competence is a unique strength of an organization which may not be
shared
by others.
(f) Skimming means keeping price very low.
(g) Primarily, strategy formulation is an operational process and strategy
implementation is an intellectual process.
(h) The focus of six sigma is on customers.
(i) BPR is an approach to maintain the existing growth of an organization.
(j) Supply chain management is conceptually wider than logistic management.
………………………………………………………..
24.
Briefly answer the following questions in 2-3 sentences each.
(a) Explain conglomerate diversification.
13
Conglomerate diversification (or lateral diversification)
The company markets new products or services that have no technological or commercial
synergies with current products, but which may appeal to new groups of customers. The
conglomerate diversification has very little relationship with the firm's current business.
Therefore, the main reasons of adopting such a strategy are first to improve the
profitability and the flexibility of the company, and second to get a better reception in
capital markets as the company gets bigger. Even if this strategy is very risky, it could also,
if successful, provide increased growth and profitability.
(b) Does HRM function play a role in organizational strategy?
Yes, it does through its consistent policies that reduce turnover coasts and intense &
effective training programs that improve workers efficiency and effectiveness.
(c) Define Benchmarking.
(d) What is Total Quality Management (TQM)?
TQM is a management innovation that emphasizes an organization's total commitment to
the customer and to continuous improvement of every process through the use of datadriven, problem solving approaches based on empowerment of employee groups & teams.
……………………………………………….
25.
Explain in detail the term corporate strategy with its characteristics.
Corporate-level strategies address the entire strategic scope of the enterprise. This is the
"big picture" view of the organization and includes deciding in which product or service
markets to compete and in which geographic regions to operate.
Eg:- 1. the resource allocation process—how cash, staffing, equipment and other resources
are distributed—is typically established at the corporate level.
2. The addition of new products or services to the existing product/service line-up,
14
Three types of corporate strategies

Growth

Stability

Retrenchment
.............................................................................
26.
Critically explain the BCG matrix.
This helps the company allocate resource. To use the chart, analysts plot a scatter graph to
rank the business units (or products) on the basis of their relative market shares and
growth rates.

Cash cows are units with high market share in a slow-growing industry. They
generate cash in excess of the amount. And the market is mature.

Dogs are units with low market share in a mature, slow-growing industry. Not much
return. The market is not growing. If Dogs, it is thought, should be sold off.

Question marks: beginners, are growing rapidly and thus consume large amounts of
cash, they do not generate much cash. A question mark has the potential to gain
market share and become a star, and eventually a cash cow when the market
growth slows. If the question mark does not succeed in becoming the market leader,
then after perhaps years of cash consumption it will degenerate into a dog when the
market growth declines.

Stars are units with a high market share in a fast-growing industry. The hope is that
stars become the next cash cows. When growth slows, stars become cash cows if they
have been able to maintain their category leadership, or they move from brief
stardom to dogdom.
As a particular industry matures and its growth slows, all business units become either
cash cows or dogs. The natural cycle for most business units is that they start as question
marks, and then turn into stars. Eventually the market stops growing thus the business
unit becomes a cash cow. At the end of the cycle the cash cow turns into a dog.
15
……………………………………..
27.
Describe in detail the SWOT analysis. What is its significance in organizations?
SWOT Analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business
venture. It involves specifying the objective of the business venture or project and
identifying the internal and external factors that are favorable and unfavorable to
achieving that objective.

Strengths: attributes of the person or company that is helpful to achieving
the objective.

Weaknesses: attributes of the person or company that is harmful to
achieving the objective.

Opportunities: external conditions that is helpful to achieving the objective.

Threats: external conditions which could do damage to the objective.
…………………………………………………………….
28. Discuss strategic alternatives with reference to Michael Porter’s strategies.
29. Write an explanatory note on strategic business units.
SBU consists of three levels: corporate headquarters, strategic business units and SBU
divisions. The SBU structure is used by large firms and can be complex, with the
complexity reflected by the organization's size and product and market diversity.
………………………………………………………….
30. Explain the concept of value chain analysis.
It shows how a product is transformed from the raw materials stage to the final consumers
It is a set of activities of the business, to develop, produce and market its products.
16
Value chain analysis is done to identify the activities in each stage and to examine the
valuable resources and capabilities
In each activity value has to be examined relative to competitor abilities. Then the firm can
rate each activity as superior, equivalent or inferior.
Studying the skills of each resources and capabilities relative to those associated with
primary and support activities, firms can understand their cost structure and identify the
activities through which they can create value.
Two models are used to do value chain analysis

Generic value chain developed by McKinsey and Company

Porters Value Chain
……………………………………………….
31. What is strategy implementation? How far it is different from strategy formulation?
strategy implementation is the process where the firm starts to implement and make the
goals and strategy they made real. Meanwhile strategy formulation is forming the best way
and ever scenario for the company would achieve. strategy formulation comes before
strategy implementation in the hierarchy of the strategic management.
…………………………………………………
32. Discuss in detail the two main styles of strategic leadership. Incomplete
Transformational leadership is the most effective strategic leadership style. This style
entails motivating followers to exceed the expectations others have of them, to continuously
enrich capabilities, and to place the interests of the organization above their own.
Transformational Leaders develop and communicate a vision for the organization and
formulate a strategy to achieve the vision. They make followers aware of the need to
achieve valued organizational outcomes. And they encourage followers to continuously
strive for higher levels of achievements.
………………………………………………….
17
33. Briefly discuss various elements of macro environment.
The demographic segment is concerned with a population's size, age structure, geographic
distribution, ethnic mix, and income distribution.
The economic segment refers to the nature and direction of the economy in a which a firm
competes or may compete.
The political/legal segment is the arena in which organizations and interest groups compete
for attention, resources, and a voice in overseeing the body of laws and regulations guiding
the interactions among nations.
The socio-cultural segment is concerned with a society's attitudes and cultural values.
The technological segment includes the institutions and activities involved with creating
new knowledge and translating that knowledge into new outputs, products, processes, and
materials.
The global segment includes relevant new global markets, existing markets that are
changing, important international political events, and critical cultural and institutional
characteristics of global markets.
...............................................................................
34. What is strategic change? Explain the change process proposed by Kurt Lewin that can
be useful in implementing strategies?
Strategic Change means changing the organizational Vision, Mission, Objectives and
ofcourse the adopted strategy to achieve those objectives.
……………………………………………………………….
35. Define corporate culture. Also elucidate the statement “Culture is a strength that can
also be a weakness”.
Intensity: extent to which individuals agree on culture content.
Integration: extent to which units share a common culture.
18
………………………………………….
36.
Do an analysis of the following:- SWOT, PEST, BCG Matrix, Ansoff Growth- Share
Matrix, Balanced Scorecard,
*SWOT Analysis is a strategic planning method used to evaluate the Strengths,
Weaknesses, Opportunities, and Threats involved in a project or in a business
venture. It involves specifying the objective of the business venture or project and
identifying the internal and external factors that are favorable and unfavorable to
achieving that objective.

Strengths: attributes of the person or company that are helpful to achieving
the objective.

Weaknesses: attributes of the person or company that are harmful to
achieving the objective.

Opportunities: external conditions that are helpful to achieving the objective.

Threats: external conditions which could do damage to the objective.
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs.
*PEST analysis stands for "Political, Economic, Social, and Technological analysis" and
describes a framework of macro-environmental factors used in the environmental scanning
component of strategic management. The model has recently been further extended to
STEEPLE and STEEPLED, adding education and demographics factors. It is a part of the
external analysis when conducting a strategic analysis or doing market research and gives
a certain overview of the different macro-environmental factors that the company has to
take into consideration. It is a useful strategic tool for understanding market growth or
decline, business position, potential and direction for operations.
The Model's Factors

Political factors, or how and to what degree a government intervenes in the
economy. Specifically, political factors include areas such as tax policy, labor law,
19
environmental law, trade restrictions, tariffs, and political stability. Political factors
may also include goods and services which the government wants to provide or be
provided (merit goods) and those that the government does not want to be provided
(demerit goods or merit bads). Furthermore, governments have great influence on
the health, education, and infrastructure of a nation.

Economic factors include economic growth, interest rates, exchange rates and the
inflation rate. These factors have major impacts on how businesses operate and
make decisions. For example, interest rates affect a firm's cost of capital and
therefore to what extent a business grows and expands. Exchange rates affect the
costs of exporting goods and the supply and price of imported goods in an economy

Social factors include the cultural aspects and include health consciousness,
population growth rate, age distribution, career attitudes and emphasis on safety.
Trends in social factors affect the demand for a company's products and how that
company operates. For example, an ageing population may imply a smaller and lesswilling workforce (thus increasing the cost of labor). Furthermore, companies may
change various management strategies to adapt to these social trends (such as
recruiting older workers).

Technological factors include ecological and environmental aspects, such as R&D
activity, automation, technology incentives and the rate of technological change.
They can determine barriers to entry, minimum efficient production level and
influence outsourcing decisions. Furthermore, technological shifts can affect costs,
quality, and lead to innovation.

Legal factors include discrimination law, consumer law, antitrust law, employment
law, and health and safety law. These factors can affect how a company operates, its
costs, and the demand for its products.

Environmental factors include weather, climate, and climate change, which may
especially affect industries such as tourism, farming, and insurance. Furthermore,
growing awareness to climate change is affecting how companies operate and the
20
products they offer--it is both creating new markets and diminishing or destroying
existing ones.
The model's factors will vary in importance to a given company based on its industry and
the goods it produces.
*The BCG matrix is a chart that helps corporations with analyzing their business units or
product lines. This helps the company allocate resources and is used as an analytical tool in
brand marketing, product management, strategic management, and portfolio analysis. The
BCG Matrix thus offers a very useful 'map' of the organization's product (or service)
strengths and weaknesses, at least in terms of current profitability, as well as the likely cash
flows.
*Ansoff Product-Market Growth Matrix is a marketing tool that allows marketers to
consider ways to grow the business via existing and/or new products, in existing and/or new
markets – there are four possible product/market combinations. This matrix helps
companies decide what course of action should be taken given current performance. The
matrix consists of four strategies:
Market penetration, Product development, Market development and Diversification.
*The balanced scorecard is a strategic planning and management system that is used
extensively in business and industry, government, and nonprofit organizations worldwide
to align business activities to the vision and strategy of the organization, improve internal
and external communications, and monitor organization performance against strategic
goals.
…………………………………………………………….
37.
Explain the four criteria of Sustainable Competitive Advantage?
1. Valuable: allow the firm to exploit opportunities or neutralize threats in its
external environment.
2. Rare able: capabilities that few, if any, competitor possess.
21
3. Costly to imitate or copy: capabilities that other firms cannot easily develop.
4. Non-substitutable: capabilities that do not have strategic equivalents.
………………………………………………………………
38.
Explain Capabilities, Core Competencies, Resources, Barney’s Model.

Capabilities: the capacity for a set of resources to perform a task or an activity
in an integrative manner.

Core competencies: a specific factor that a business sees as being central to the
way its perform. It is a collective learning in the org, epically how to coordinate
diverse production skills and integrate multiple streams of technologies.

Resources: inputs into a firm’s production process, such as capital equipment,
skills of employees, patents, finances and talented managers.
………………………………………………………………..
39.
Explain Porter’s Five Forces Model
It is a framework for the industry analysis and business strategy. It consist of five forces
that affect a firm ability to serve its customers and make profits. The forces are:
1. Threat of substitute product: goods & services from outside a given industry that
perform similar or the same function as a product that the industry produces.
2. Degree of rivals: competitive rivalry intensifies when a firm is challenged by a
competitor’s actions or when a company recognizes an opportunity to improve its
market position.
3. Threat of new entrants: new entrants bring additional production capacity which
led to less revenue and lower returns for competing firms.
4. The bargaining power of buyer: the ability of customers to put the firm under
pressure and it also affects the customer sensitivity to price changes. Customer
bargain for higher quality, greater levels of services and lower prices.
5. The bargaining power of supplier: suppliers of raw materials, components, labor
and services to the firm can be a source of power over the firm.
22
………………………………………………………………..
40.
Discuss organizational stakeholders
All of a firm employees, including both non-managerial and managerial personnel.
…………………………………………
41.
Discuss the barriers to entry into an industry.
1. Capital requirements
2. Economies of scale
3. Technology & know how
4. Access to raw materials
5. Geographic locations
6. Product differentiation
7. Access to distribution
8. Expected relations
9. Governmental policies
…………………………………………………
42.
Discuss any of the following strategies:- Cost Leadership, Differentiation, Focus,
Cost/Focus, Focused Differentiation.

The cost leadership strategy: is an integrated set of actions taken to produce
goods and services with features that are acceptable to customers at the lowest
cost, relative to that of competitors. Firms using this strategy commonly sell
standardized goods and services. Effective use of cost leadership strategy
allows firms to earn above average returns.

Differentiation strategy: is an integrated set of actions taken to produce goods
or services (at acceptable cost) that customers perceive as a being different in
ways that are important to them.

Focus strategy: is an integrated set of actions taken to produce goods or
services that serve the needs of a particular competitive segment.
23
…………………………………………………………
43.
Discuss quality dimensions of a product (page 111 of set book).
1. Performance: operating characteristics
2. Features: important special characteristics.
3. Flexibility: Meeting operating specification over some period of time.
4. Durability: amount of use before performance deteriorates.
5. Conformance: match with pre-established standards.
6. Serviceability: Ease and speed of repair.
7. Aesthetics: How a product looks and feels.
8. Perceived quality: subjective assessment of characteristics.
…………………………………………….
44.
What are the advantages and disadvantages of 1st mover, second mover and late
mover (pages 107 to 109 of set book)
First-mover advantage or FMA is the advantage gained by the initial occupant of a market
segment. This advantage may stem from the fact that the first entrant can gain
control of resources that followers may not be able to match. Sometimes the first
mover is not able to capitalize on its advantage, leaving the opportunity for another
firm to gain second-mover advantage.
……………………………………………………
45.
Define the following:- Slow Cycle Markets, Fast Cycle Markets and Slow Cycle
Markets (pages 113 to 117 of set book).

Slow cycle market: are those in which the firm’s competitive advantages are
shielded from imitation commonly for long periods of time and where imitation is
costly.

Fast cycle market: are markets in which the firm’s capabilities that contribute to
competitive advantages aren’t shielded from imitation and imitation is often rapid
and inexpensive.
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
Standard cycle market: are markets in which firm’s competitive advantages are
moderately shielded from imitation and where imitation is moderately costly.
………………………………………………………………..
46.
Explain the reasons for diversification as well as the three types of diversification
firms can engage in.
The main reasons of adopting such a strategy are:
1. To improve the profitability and the flexibility of the company.
2. To get a better reception in capital markets as the company gets bigger.
3. To provide increased growth and profitability.
There are three types of diversification: concentric, horizontal and conglomerate:
Concentric diversification
This means that there is a technological similarity between the industries, which means that
the firm is able to leverage its technical know-how to gain some advantage. For example, a
company that manufactures industrial adhesives might decide to diversify into adhesives to
be sold via retailers. The technology would be the same but the marketing effort would
need to change. It also seems to increase its market share to launch a new product which
helps the particular company to earn profit. However, there's one more example, Addition
of tomato ketchup and sauce to the existing "Maggi" brand processed items of Food
Specialities Ltd. is an example of technological-related concentric diversification.
Horizontal diversification
The company adds new products or services that are technologically or commercially
unrelated (but not always) to current products, but which may appeal to current
customers. In a competitive environment, this form of diversification is desirable if the
present customers are loyal to the current products and if the new products have a good
quality and are well promoted and priced. Moreover, the new products are marketed to the
same economic environment as the existing products, which may lead to rigidity and
instability.
Conglomerate diversification (or lateral diversification)
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The company markets new products or services that have no technological or commercial
synergies with current products, but which may appeal to new groups of customers. The
conglomerate diversification has very little relationship with the firm's current business.
…………………………………………….
47.
What strategies can a small firm with 10% market share in the airline industry use
to remain in business and still make profits?
COLLABORATING with big companies in the same industry.
………………………………………………….
48.
What is an attractive industry?
An attractive industry: an industry with opportunities that can be exploited by the firm's
resources and capabilities.
………………………………………………
49.
What strategies are appropriate for a firm with a product in the introduction,
growth or the maturity or decline stage of the PLC?
The different stages in a product life cycle are:
1. Market introduction stage:
I:* costs are high
II:* slow sales volumes to start
III:* little or no competition - competitive manufacturers watch for acceptance/segment
growth losses
IV:* demand has to be created
V:* customers have to be prompted to try the product
VI: makes no money at this stage
2.Growth stage:
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I:* costs reduced due to economies of scale
II:* sales volume increases significantly
III:* profitability begins to rise
IV:* public awareness increases
V:* competition begins to increase with a few new players in establishing market
VI:* increased competition leads to price decreases
3. Mature stage
I:* Costs are lowered as a result of production volumes increasing and experience curve
effects
II:* sales volume peaks and market saturation is reached
III:* increase in competitors entering the market
IV:* prices tend to drop due to the proliferation of competing products
V:* brand differentiation and feature diversification is emphasized to maintain or increase
market share
VI:* Industrial profits go down
4. Saturation and decline stage
I:* costs become counter-optimal
II:* sales volume decline or stabilize
III:* prices, profitability diminish
IV:* profit becomes more a challenge of production/distribution efficiency than increased
sales
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50.
Explain a Competitors Analysis and how does it help a firm compete effectively.
Competitor analysis in marketing and strategic management is an assessment of the
strengths and weaknesses of current and potential competitors. This analysis
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provides both an offensive and defensive strategic context through which to identify
opportunities and threats.
Competitor analysis informs the firm about the future objectives, current strategies,
assumptions, and capabilities of the companies with which it competes directly. It is
an assessment of the strengths and weaknesses of current and potential competitors.
This analysis provides both an offensive and defensive strategic context through
which to identify opportunities and threats. Competitor profiling coalesces all of the
relevant sources of competitor analysis into one framework in the support of
efficient and effective strategy formulation, implementation, monitoring and
adjustment.
…………………………………………….
51.
What is involved in an organizational audit and how does it help an organization?
It is a tool used by organization`s management to operate the nature of the business they
are involved in. it is achievable through aligning international structure and systems with
external environment.
It helps the organization in urgent changes in the market and consumer both. So the
company can get to satisfy consumers needs and adapt with market changes in order to
survive.
…………………………………………………………….
52.
What is your understanding of strategic fit?
Strategic fit express the degree to which an organization is matching its resources and
capabilities with the opportunities in the external environment. The matching takes place
through strategy and it is therefore vital that the company have the actual resources and
capabilities to execute and support the strategy. Strategic fit can be used actively to
evaluate the current strategic situation of a company as well as opportunities as Mergers
and Acquisitions (M&A) and divestitures of organizational divisions.
…………………………………………………………
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53.
Briefly explain the meaning of unmet needs and how this can be exploited.
The consumer needs that the company can't satisfy through its current resources and
capabilities.
……………………………………………………..
54.
What is GAP Analysis and how can a firm exploit it to best advantage.
Gap analysis is a tool that helps a company to compare its actual performance with its
potential performance. At its core are two questions: "Where are we?" and "Where do we
want to be?". If a company or organization is not making the best use of its current
resources or is forgoing investment in capital or technology, then it may be producing or
performing at a level below its potential. This concept is similar to the base case of being
below one's production possibilities frontier.
…………………………………………………………
55.
What are Key Success Factors or Critical Success factors?
Critical Success Factor (CSF) is the term for an element which is necessary for an
organization or project to achieve its mission. They are the critical factors or activities
required for ensuring the success of your business. The term was initially used in the world
of data analysis, and business analysis. For example, a CSF for a successful Information
Technology (IT) project is user involvement.
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